Correlation Between Cornerstone Strategic and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic and Nuveen Municipal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cornerstone Strategic and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Strategic Value and Nuveen Municipal High, you can compare the effects of market volatilities on Cornerstone Strategic and Nuveen Municipal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cornerstone Strategic with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Nuveen Municipal.
Diversification Opportunities for Cornerstone Strategic and Nuveen Municipal
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cornerstone and Nuveen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High and Cornerstone Strategic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cornerstone Strategic Value are associated (or correlated) with Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal High has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Cornerstone Strategic and Nuveen Municipal
Considering the 90-day investment horizon Cornerstone Strategic Value is expected to under-perform the Nuveen Municipal. In addition to that, Cornerstone Strategic is 3.37 times more volatile than Nuveen Municipal High. It trades about -0.09 of its total potential returns per unit of risk. Nuveen Municipal High is currently generating about 0.23 per unit of volatility. If you would invest 1,127 in Nuveen Municipal High on September 12, 2024 and sell it today you would earn a total of 32.00 from holding Nuveen Municipal High or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornerstone Strategic Value vs. Nuveen Municipal High
Performance |
| Timeline |
| Cornerstone Strategic |
| Nuveen Municipal High |
Cornerstone Strategic and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Strategic and Nuveen Municipal
The main advantage of trading using opposite Cornerstone Strategic and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic position performs unexpectedly, Nuveen Municipal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nuveen Municipal will offset losses from the drop in Nuveen Municipal's long position.| Cornerstone Strategic vs. Oxford Lane Capital | Cornerstone Strategic vs. Orchid Island Capital | Cornerstone Strategic vs. Guggenheim Strategic Opportunities | Cornerstone Strategic vs. Stone Harbor Emerging |
| Nuveen Municipal vs. Oxford Lane Capital | Nuveen Municipal vs. Orchid Island Capital | Nuveen Municipal vs. Guggenheim Strategic Opportunities | Nuveen Municipal vs. Stone Harbor Emerging |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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